Selling your business

Many businesses are restructuring in the recession. Some are picking up cheap assets when competitors go under but still need to be careful to carry out proper due diligence.

Lloyds TSB’s acquisition of HBOS has come in for some criticism of the directors as the company may have bitten off more than it can chew and lurking liabilities may not have been immediately apparent during the very swift acquisition process. Even with a forced quick sale buyers need to be very careful to look at all aspects of the business they propose to buy even when they simply buy assets rather than shares.

The OFT and Competition Commission have recently issued draft joint guidelines on how they assess the competitive impact of mergers and now is the time to comment on those if you have an interest in that field. Mergers may need clearance from the competition authorities where the value of assets acquired exceeds £70m or a market share of 25% is enhanced or created. If this is not obtained there is a risk that the buyer will be ordered to divest itself of assets after the purchase.

If you are interested in acquiring assets from a distressed competitor or your business may be in difficulties and as a director/shareholder you want to know your legal rights if you were to acquire assets from that business in order to continue the business in some form, please contact Cathy Cook at Jordans Solicitors Wakefield Office in West Yorkshire.